Married vs Cohabiting Couples - What's the difference?

Comparison of how married couples and cohabiting couples are treated by the law when they end their relationships

Married couples have two legal processes to complete when they decide to divorce; the divorce itself and reaching a financial settlement (and having it approved as a Court Order).

Cohabiting couples do not acquire the same financial rights as married couples. Many people believe that by cohabiting for a long time they have entered into a common law marriage and gained legal rights like married couples. This is not the case.

If you are cohabiting, you do not have automatic rights to each other’s property or assets. Nor are you entitled to inherit your partner’s assets on their death.

The process of obtaining a financial settlement in a divorce is called, financial remedy. In financial remedy, the court seeks to reach a fair settlement that meets the needs of each party. It is very important to get a sealed financial order when you are getting divorced as otherwise you leave yourself open to financial claims from your former spouse in the future.

If you are not looking to marry but want protection, you will be advised to have a Cohabitation Agreement which sets out the rights and obligations of each partner towards the other. You can share property and assets in a Declaration of Trust. It reflects the ownership of property and the proportions contributed to the purchase of the property by each party. Even if you have a Cohabitation Agreement or Declaration of Trust, it is also important to have a will to ensure that your assets and property pass to your chosen beneficiaries.

If your spouse solely owns the matrimonial home, you should consider registering a Home Rights Notice or a Unilateral Notice with H. M. Land Registry against the title. This makes sure that third parties are aware of your interest in the property and makes it difficult for the owner to sell it before financial remedy issues are resolved.

With cohabiting couples, the legal presumption is that the person in whose name the property is registered is entitled to all the equity in the property. This presumption can be rebutted by bringing proceedings under the Trusts of Land and Appointment of Trustees Act 1996.

With married couples, provision can be made in a pension sharing order for a percentage of one party’s pension to be transferred into a pension for the other party for them to draw pension benefits at retirement age. It is also possible for one party to exchange their claim against the other party’s pensions for capital now from assets held by the other spouse.

However, unmarried couples have no automatic right to share pension assets when they separate.

With married couples, if one party cannot meet their reasonable financial needs after maximising their own earning capacity and the other party has sufficient income after meeting their own needs then the surplus income may be paid as maintenance to the other spouse.

However, unmarried couples have no automatic right to maintenance when they separate.

Financial disputes between unmarried couples are dealt with in Civil Courts under the Civil Procedure Rules, the rules are strict and there are significant costs consequences.

Financial disputes between married couple are heard in the Family Court where the Judges have greater discretion than in the civil courts and generally each party pays their own costs.

If you’re looking for family advice, do get in touch.